Industry 4.0: challenges and opportunities

With Industry 4.0 in full swing, it’s up to technology providers to help manufacturing companies overcome the challenges it brings and embrace the opportunities.

By definition, revolutions are disruptive, and the fourth industrial revolution, or industry 4.0, is no exception. In fact, experts predict this new wave of revolution will foster just as much change as those that came before. Yet, whereas historical developments brought forward by steam power, electricity and digital machinery were all based solely on new technologies, Industry 4.0 is different, focusing instead on how new and existing tools can be used in innovative ways.

Industry 4.0 has seen the rise of robots working alongside factory workers, and autonomous vehicles replenishing production line supplies. Sensor networks and communications technologies have been used to connect designers with factory workers, with intelligent machines and software interacting autonomously through the cloud, and facilities connected in real time to suppliers and customers.

Paul Redmond, global head of smart services, IT innovation with RS Components, explains that smart factories will also enable companies to predict when their equipment is about to fail and therefore take preventative measures to make sure it doesn’, tor inform maintenance team of incident sooner so they can react more quickly. “IoT could save organisations lots of money by improving uptime through predictive maintenance, or else informing them in real time through re-active maintenance”, he says.

This is just the tip of a very large and rapidly expanding iceberg. Practices such as this, it is believed, will make manufacturing operations more flexible, improve productivity and facilitate new, more efficient business practices and entrepreneurial approaches.

“It’s not that companies will go out of business if they don’t take advantage of the new technologies,” says Martin Strutt, region director of manufacturers’ organisation the EEF. “But it will be harder for them to compete with firms that do.”

A recent report from Future Market Insights predicted smart factories will make US$215 billion by 2025. That’s up from $ 51.9bn in 2014. According to General Electric, the smart factory concept could be worth $10–15 trillion to global GDP over the next 20 years.

However, despite potential benefits, there are some who are reluctant to embrace these changes. Almost half the chief executives questioned as part of PwC’s annual survey, published in January, expressed concerns that investors, employees and the wider public would distrust the concept.

UK leaders surveyed said they were concerned that it would be hard to find new people with necessary digital skills to run new systems and adapt them to future technologies. The ability of smart systems to communicate across factories and with suppliers and customers that have different systems also emerged as a concern.

Strutt believes industry specific data standardisation would help to solve the latter problem. With this, he says, firms could use one interface for all their customers and suppliers.

At the top of industry concerns, though, were those relating to cybersecurity. A June 2016 report from accountancy and business advisory firm BDO LLP found that 73 per cent of engineers surveyed believed investing in smart factories increased the risk of security breaches – that’s hackers accessing IT systems through an Internet of Things (IoT) asset. Only 48 per cent felt their companies had the IT system to counter a hack, but 35 per cent said they would be okay with a few breaches, as long as IT upgrades were available.

According to Strutt, technology providers need to tell manufacturers about security features that come with their products and explain how the features work to prevent cyber-attacks.

For Redmond, it is also important for IT teams to work closely with operational teams generally, and provide support within a common IoT strategy.

“IT teams need to think more in terms of business objectives, benefits and outcomes, whilst operational technology teams need to better understand what the IoT can bring and clearly define the benefits,” he says.

Changing tunes

According to Andy Ward, chief technology officer at Ubisense, specialists in enterprise location intelligence solutions, the conservative attitude of those who run manufacturing production lines can also prevent companies from taking on new smart technologies.

“People do the same thing again and again and don’t want to tinker with something that works reasonably well,” he says. “They know the existing ways of working don’t enable them to meet challenges of simultaneously improving quality, reducing cost and managing complexity,” he says, “but they have to decide on whether they want to gamble on something new.”

At the same time, consumers demand for increasingly complex products and Ward believes that makes smart technologies increasingly important for the manufacturing industry. For instance, he explains that today’s car buyers want models built to their own specifications.

“The challenge for manufacturers is to balance repetition and automation with demand for variation whilst at the same time maintaining a high quality product,” he says. “Whatever operation happens at a particular point on the production line, it’s important the particular tool operates in the right way at the right time, for the right amount of time. Rather than configure each tool for every job, all an operative has to do is pick up the tool, use it on the car and it does the right thing.”

Ubisense produces sensors that can track the tools and location of technology around the factory. Software enables the system to automatically see when a tool is in use and an indoor GPS tells the system how far a particular product has moved down the production line.

Of course, upgrading factory systems to embrace Industry 4.0 requires a lot of investment which could be seen as a potential roadblock to widespread uptake. The good news is that across the board, governments and coalitions are committing to help get things off the ground.

Last year, the German government said it would provide €500 million to encourage research into Industry 4.0. While in the USA, technology firms, manufacturers, suppliers, government agencies and universities have formed the Smart Manufacturing Leadership Coalition, a not-for-profit-organisation funded by $140m of public and private investment.

In the UK, in January this year, Theresa May announced that Industry 4.0 was one of five areas of focus in the government’s plan to boost post-Brexit British economy. In the previous November, the government had announced £4.7 billion would be available for research and development into areas such as robotics, artificial intelligence, 5G mobile technology and smart energy.

“Often, people are nervous about where to start because the whole thing seems so big,” Redmond says. “I’d advise companies to think big, but start small. Start with a simple non-invasive, and ideally interoperable, scalable smart solution, perhaps a smart motor on a conveyor line or smart section of lighting, see how it works, confirm the money it saves and benefits that can be taken from the data generated, and then when you’re satisfied, bring in another smart system.”

Strutt adds: “It doesn’t have to be a huge single investment to make a massive step forward. A series of evolutionary steps would be just as effective. Sometimes people are scared off by the headlines.”

Despite these concerns, things seem to have got off to a good start. This May, 56 per cent of CEOs surveyed by Capgemini’s Digital Transformation Institute said that they’ve already invested $100m or more into smart factories, as have 46 per cent of UK manufacturers, over the last five years.

In general, manufacturers expect that 21 per cent of their plants will be smart factories by the end of 2022. Meanwhile, 67 per cent of industrial manufacturing and 62 per cent of aerospace and defence organisations are already heavily invested in smart factory initiative, but only 37 per cent of life science and pharmaceutical companies have done the same.

The Capgemini report also found that 84 per cent of CEOs say they either have a smart factory initiative in place or that they plan to introduce one. However, only eight per cent are satisfied with their progress and 31 per cent say they’re struggling with the concept.

For Ward, it is up to smart technology providers to demonstrate high standards to manufacturers, in order to gain industry trust. “Providers need to demonstrate their technology works better than what is already out there and that it’s reliable,” he says. “If a car production line stops, it’s £300 per second, not coming off the production line at the end.”

Strutt advises companies not to invest in technology for its own sake. Instead, they should have a clear view of what their own strategy is and how they compete, and only then look at what’s available to support that.

That said, he believes UK companies are in a good position to take up opportunities that Industry 4.0 present. “We already have a lot of the technical skills we need and more data analytics degrees are appearing,” he says.

The main focus, though, is on leadership and management to embrace operating in an uncertain environment. “They should be prepared to try new things, accept that sometimes things won’t go as planned and if they don’t, just try something else,” says Strutt. “Different industries have different needs. Get out and see what’s available.”